US president Joe Biden has used national security powers to hit the Chinese steel and aluminium imports being imported to North America via Mexico.
The US, Mexico and Canada will work to apply a 25% tariff on steel that is not melted and poured within North America, with a corresponding 10% tariff on aluminium goods.
“Mexico and the US are taking key measures today to protect the North American steel and aluminium markets from unfair trade,” the White House said in a statement.
Joint decision
Both Biden and Mexican president Mexico Andrés Manuel López Obrador have signed off on the decision, with implementation of the measures by both countries.
Additionally, Mexican officials will require more information about the origins of any steel imports in order to “improve transparency of the origins of its imports.”
White House national economic adviser Lael Brainard told reporters:
"These actions fix a major loophole that the previous administration failed to address, and that countries like China use to avoid US tariffs by shipping their products through Mexico."
The Biden administration used Trump-era powers to apply the tariffs. Two reports in January 2018, sent to the president by the commerce secretary, found that steel and aluminium were being imported into the US in such quantities and circumstances “as to threaten to impair the national security of the US”.
Chinese response pending
Chinese diplomats have not yet publicly commented. However, Beijing has called for the US to reverse any decisions on tariffs and threatened retaliatory measures in the past.
China remains the largest producer of steel in the world. European and North American officials have made accusations that Beijing is overproducing the product to damage other markets, something that Chinese officials have denied.
In June, the EU imposed tariffs of up to 38% on Chinese electric vehicles and launched investigations into other aspects of the Asian nation’s trade policy.
Political moves
A 25% tariff already applies to imported Chinese steel under a decision made by Biden on 14 May 2024, as reported by the Daily Update. The new levy would hit goods that have already entered the North American market via Mexico.
Biden makes the move as the US enters campaigning season ahead of the 2024 presidential election. Despite a debate widely regarded as poor even by close allies, Biden remains within striking distance in the polls.
The incumbent has pursued a policy of cooperation with China on certain issues while encouraging US supply chains to shift towards more friendly nations. By comparison, his likely opponent, former Republican president Donald Trump, has doubled down on his anti-Beijing rhetoric.
Trump has pledged even higher tariff rates on Chinese imports, as high as 60%, and said he would also raise tariffs on all imports to 10%. The current rate for most goods is 3%.